Under the deal, Corbis’ imaging division has been sold to Visual China Group. In turn, under an agreement crafted with VCG, Getty Images will have the right to license Corbis’ images in countries across the world, except China.
In a major boost to its business, Getty Images has acquired the distribution rights to all the images in the massive library of its main rival, Corbis — albeit, in a roundabout way.
Seattle-based Corbis, owned by Bill Gates, announced Friday it has sold its images division to Visual China Group (VCG), based in Beijing, for an undisclosed amount. A VCG division called Unity Glory will own Corbis’ images and motion archives.
At the same time, Getty, which is based in New York and has its largest office in Seattle, announced that it had struck an exclusive deal with VCG to license all of Corbis’ images across the world, except in China.
Corbis will continue to exist under its Corbis Entertainment division, which works on product placement and advertising. The company had been struggling recently as competition in the imaging-licensing world increased. Corbis cut about 15 percent of its staff in November, Bloomberg News reported.
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VCG declined to comment on whether it would hire any of the Corbis Images staff or if there would be layoffs. Corbis Entertainment, which is planning to change its name in the coming months, plans to keep all employees that worked on the advertising and product-placement business.
The entertainment division has been growing, with Corbis viewing it as a bigger opportunity for profit. The time to sell the images business had come, said CEO Gary Shenk.
“There is a lot of consolidation in the images business,” he said. “We’ve had a lot of interest. We decided that we wanted to take a moment where we could maximize the value of that asset.”
Corbis launched Branded Entertainment Network, a product-placement agency, two years ago. It also has a celebrity-content business and a rights and music-clearance division that it will keep.
“We’ve had to reinvent ourselves and focus on the premium market,” Shenk said. “There was a significant decline in pricing, and it was falling faster than we can license the images.”
Corbis owns a huge library of modern and historical images — notably, the Bettmann Archive and the Sygma Archive. Some photojournalists expressed concern Friday that control of the library would be moving outside the country and that further consolidation of the industry was coming.
“The concern in American photojournalist community is the lack of appreciation and investment in photojournalism,” said Kenny Irby, an independent consultant who founded the Poynter photojournalism program.
He noted that the images possibly could now be used for commercial purposes, such as T-shirts, rather than editorial uses as most are intended.
More distribution companies are working with commercial interests, and Friday’s deals mean there are fewer companies for photojournalists to contract with.
Getty co-founder and chairman Jonathan Klein celebrated the boon for Getty, tweeting, “Almost 21 years but got it. Lovely to get the milk, the cream, cheese, yogurt and the meat without buying the cow.”
Indeed, Getty will reap many of the benefits of the expanded library without shelling out the money to buy Corbis. The company also has been struggling to keep up with growing competition from smaller companies, notably Shutterstock and Fotolia.
Getty is still by far the largest player in the field, and taking over Corbis’ assets will help quite a bit, said Moody’s senior credit officer Carl Salas. Getty now has a library of nearly 200 million images. Salas reports it has yearly revenue of more than $800 million.
“It’s a positive for Getty,” he said Friday. “For Getty, it gives them access to additional high-end exclusive imagery, and they can distribute that globally to all the channels.”
But the agreement for Corbis’ library isn’t likely to solve all of Getty’s issues. Salas noted in a September report that Getty faces a threat of debt restructuring by the end of 2017. Nothing has moved the needle on that yet, he said.
Most of the issues exist in the so-called midstock segment, where Getty competes against companies like Shutterstock. Corbis will help mainly in the premium market.
Getty has partnered with VCG for about 10 years, and will now distribute the Corbis library in every country expect China.
“We’re super excited,” said Craig Peters, senior vice president of business development, product and content at Getty. “The content that Corbis has and the partners and contributors it works with have always been kind of a key competitor to Getty Images and a great source of content.”
Getty will be working on transitioning Corbis’ library onto its existing platform in the coming months.